financial performance – magnum berhad group · evident in the strong sales of m-system bet for...
TRANSCRIPT
MAGNUM BERHAD
42nd Annual General Meeting
30 May 2018
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MAGNUM BERHAD – 42nd AGM on 30 MAY 2018
Though Malaysian economy continued to grow at 5.9% in 2017,
our revenue has declined marginally by RM10.4 mil (0.5%) due to:
• Lower consumer spending power, impacted by
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REVIEW OF OPERATIONS
Rising cost of living
Increased household debts
• Intense competition from rampant illegal bookies as well as
online gambling especially in Sarawak
MAGNUM BERHAD – 42nd AGM on 30 MAY 2018
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REVIEW OF OPERATIONS (cont’d.)
MAGNUM BERHAD – 42nd AGM on 30 MAY 2018
Proliferation of illegal operators
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REVIEW OF OPERATIONS (cont’d.)
MAGNUM BERHAD – 42nd AGM on 30 MAY 2018
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REVIEW OF OPERATIONS (cont’d.)
Grand Dragon Lottery (GD Lotto) is a Daily Live 4 Digit numbers game
provider in Cambodia. Gaining popularity and is affecting our sales in Melaka
and Johor.
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MAGNUM BERHAD – 42nd AGM on 30 MAY 2018
REVIEW OF OPERATIONS (cont’d.)
Proliferation of illegal operators – Illegal Prize Structure in Penang
MAGNUM BERHAD – 42nd AGM on 30 MAY 2018
Strategies implemented by Magnum
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Introduction of a new game called Magnum
Life to replace 4D Powerball in April 2018
STRATEGIES GOING FORWARD
Project Rebranding & Reimaging – launched on 8.1.18
in commemoration of our 50th Anniversary.
• Refreshed logo which was incorporated into all
our selling agents signboard
• Refreshed our 4D website and mobile phone apps
– more interactive and appealing to younger
generation with emphasis on youth and fun
• New outlet design with digital display and ticket
checker
MAGNUM BERHAD – 42nd AGM on 30 MAY 2018
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STRATEGIES GOING FORWARD (cont’d)
Continue to innovate & improve our products – newly
launched Magnum Life, 1st of its kind in Malaysia!
Continue to work with the Government to create a “win-
win” position, especially against the illegal operators
Hardware upgrades & Software enhancement to improve
operational efficiencies
Focus on enhancing customer satisfaction through
provision of training and incentives to our selling agents
Continue with our ongoing CSR activities
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MAGNUM BERHAD – 42nd AGM on 30 MAY 2018
REBRANDING AND REIMAGING - new refreshed look of the store-front
More appealing
and inviting to the young
Modern look and
feel
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MAGNUM BERHAD – 42nd AGM on 30 MAY 2018
REBRANDING AND REIMAGING (cont’d)
Digital TV with
advertising content
Ticket checker for customer
convenience
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MAGNUM BERHAD – 42nd AGM on 30 MAY 2018
REBRANDING AND REIMAGING (cont’d)
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MAGNUM BERHAD – 42nd AGM on 30 MAY 2018
REBRANDING AND REIMAGING (cont’d)
Signboard with
Old logo
Signboard with
New logo
Same outlet
MAGNUM BERHAD – 42nd AGM on 30 MAY 2018
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SHARE BUY-BACK SINCE LAST SHAREHOLDERS’ MANDATE
Date of
Purchase
Total No.
of shares
Purchased
Lowest
Price
Paid
(RM)
Highest
Price
Paid
(RM)
Average
Price
Paid
(RM)
Total
Purchase
Conside-
ration
(RM)
20.6.17 10,000 1.71 1.71 1.71 17,159.71
MAGNUM BERHAD – 42nd AGM on 30 MAY 2018
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Queries from
Minority Shareholder
Watchdog Group
MAGNUM BERHAD – 42nd AGM on 30 MAY 2018
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Strategic & Financial Matters
Q1.
As stated under Management Discussion and Analysis (MD&A) on Page
20 of the Annual Report, the legal number forecast operators (“NFO”)
industry has always been operating in a challenging environment,
burdened by stiff competition from illegal operators, decreasing
disposable income and the financial impact on consumers arising from
GST implementation since April 2015.
i. Please share whether the threat from illegal operators has worsened
and whether the negative impact on Magnum’s revenue has increased
further?
ii. Has competition from illegal operators increased? In what manner and
how will Magnum counter the competition?
iii. With GST to be zero-rated, to what extent will it enhance revenue?
MAGNUM BERHAD – 42nd AGM on 30 MAY 2018
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A1.
i) The threat from the illegal operators remains clear and present. However,
the rate of decline has stabilised.
ii) The competition from the illegal operators continues to be intense and the
counter measures taken by Magnum are to innovatively design product
offerings that the illegal operators are unable to emulate such as:
• fractionalised jackpot betting for both 4D Jackpot and 4D Jackpot
Gold; and
• Newly launched “Magnum Life” where the top 2 prizes pay RM1,000
per day for 20 years and 100 days respectively
iii) As stated in our Annual Report, our Gaming revenue is stated at net of
GST. Hence, with GST at 0%, our revenue will increase to the extent of
GST charged on Gaming Supply (ie 6/106 * Gaming Supply). However,
the GST savings is dependent on the sales, prizes payout, interpretation
of the value of Gaming Supply and the impact (if any) of the imposition of
Sales and Service Tax.
MAGNUM BERHAD – 42nd AGM on 30 MAY 2018
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Q2.
As stated under the Chairman’s Statement on Page 14 of the Annual
Report, “growing consumer interest in fractionalised jackpot betting was
evident in the strong sales of m-System Bet for the Magnum 4D Jackpot
game, a game variation that was first launched on 25 August 2016. Your
Company reacted swiftly to this trend by launching a new fractionalised
game variation on 15 May 2017 for the 4D Jackpot Gold game, which we
named as m-Gold”.
To what extent have these respective launches improved the sales and
will they be sustainable?
A2.
The sales from the fractionalised jackpot betting for both 4D Jackpot and
4D Jackpot Gold in 2017 has contributed substantially to the sales growth
of these 2 products especially m-Gold. M-Gold has proven to be very
popular as it offers a more affordable option for players to cover a larger
pool of numbers. The Company is optimistic that the growth from these
game variations will continue to be positive and sustainable.
MAGNUM BERHAD – 42nd AGM on 30 MAY 2018
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Q3.
As stated under the Chairman’s Statement on Page 14 of the Annual
Report, “while your Company is confident that the ongoing initiatives taken
will meet existing customers’ expectations, yet, in today’s complex
informational and digital age, new consumers are becoming ever more
sophisticated and demanding. To meet this challenge, Magnum and its
management team have invested in strategies to widen its customer base
to capture new and non-traditional market segments”.
Please brief on how Magnum and its management team are able to widen
its customer base to capture new and non-traditional market segments.
MAGNUM BERHAD – 42nd AGM on 30 MAY 2018
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A3.
Strategies adopted by Magnum to widen its customer base include the
following:
• Create fresh gaming experience to attract new generation of players via:
renovation of outlets to provide a new and welcoming experience
Launch of new brand image that is young, fun and progressive
Introduction of new game Magnum Life designed specifically for the
new market segment
• Attain the highest level of customer satisfaction and service with sales-
force training and incentivisation programmes;
• Active engagement on social media platforms to:
connect and engage the younger market segment especially casual
players who can potentially become loyal customers
create “top of mind” awareness and opportunity for product trials
• Carry out sales campaigns and ground events to target the next
generation players and untapped non traditional market segment.
MAGNUM BERHAD – 42nd AGM on 30 MAY 2018
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Q1.
The Company did not disclose the senior management’s remuneration
component in bands of RM50,000 as recommended under Practice 7.2 of
MCCG and there was no explanation of a suitable alternative practice to
meet the intended outcome.
Under Paragraph 3.2A(b), Practice Note 9 of the Main Market Listing
Requirements, the Company must disclose the alternative practice it has
adopted and how such alternative practice achieves the intended outcome
as set out in the MCCG.
There is also no disclosure of an alternative practice.
Please take note on this to comply with the Listing Requirements which
requires disclosure of an alternative practice.
Corporate Governance Matters
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A1.
As disclosed in our 2017 Corporate Governance Report, released together
with our 2017 Annual Report which is also made available on the
Company’s website, our Explanatory for Departure from Practice 7.2 of the
MCCG which includes our disclosure of an alternative practice is as follows:-
Explanation for Departure from of Practice :
The Remuneration Committee and the Board are of the view that:-
• the disclosures of key management personnel’s remuneration, which
include the top five senior management’s remuneration, in the Audited
Financial Statement is adequate as it complies with the requirement of
Paragraph 17 of the MFRS 124 – Related Party Disclosures; and
Corporate Governance Matters
MAGNUM BERHAD – 42nd AGM on 30 MAY 2018
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A1. Explanation for Departure from of Practice (cont’d.)
• the disclosures of senior management’s remuneration on a named basis
is not to the Group’s advantage and will be detrimental to its commercial
interest due to the small niche industry where the gaming specific talent
pool is very limited especially at the senior levels of management.
In addition, the detailed remuneration of a Senior Management who is an
Executive Director has been disclosed in the 2017 Annual Report.
Corporate Governance Matters
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END